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When do industries cluster? A proposal on how to assess an industry’s propensity to concentrate at a single region or nation Export

Research Policy, Vol. 31, No. 6. (August 2002), pp. 849-858.

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cluster economics geography

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Often the literature on clustering implicitly assumes national or regional–sectoral agglomeration to be a general phenomenon applying to all or most businesses. We argue that not all industries are equally affected by the process of clustering. Therefore, the question on how to assess the relevance of clustering for a particular company or industry becomes important. It is deduced that those industries with a divisible production process and a transportable product or service fulfil the necessary conditions for clustering. A long value-chain including multiple distinct competencies, innovation-intensity characterised by “network-innovations” and the volatility of markets further increase the potential for an industry to cluster. Besides providing a heuristic for strategic management, this paper alerts regional planners that only in those regions whose economic structure is characterised by industries subject to clustering, the promotion of local network-building is relevant.


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